18 February 2012 Written by  Tefera Eshetu and Mulugeta Getu

International Chamber of Commerce (ICC) and the International Court of Arbitration

A. Background and Working of ICC

The International Chamber of Commerce (ICC) was founded in 1919 to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. The organization's international secretariat was established in Paris and the ICC's International Court of Arbitration (ICA) was created in 1923.

The International Chamber of Commerce (ICC) is a non-profit, private international organization that works to promote and support global trade and globalization. It serves as an advocate of some world businesses in the global economy, in the interests of economic growth, job creation, and prosperity. As a global business organization, made up of member states, it helps the development of global outlooks on business matters. ICC has direct access to national governments worldwide through its national committees among others.

To attain this objective, ICC has developed a range of activities. The ICC International Court of Arbitration (ICA) is a body which hears and resolves private disputes between parties. Its voluntary rule-writing for business spreads best practice in areas as varied as banking, marketing, anti-corruption and environmental management. Their policy-making and advocacy work keeps national governments, the United Nations system and other global bodies apprised of the views of the world business on some of the most pressing issues of the day.

ICC's first president was Etienne Clémentel. In December 2004 the World Council elected Yong Sung Park as the Chairman of ICC, Marcus Wallenberg as the Vice-Chairman and Jean-Rene Fourtou as the Honorary Chairman. In June 2005, Guy Sebban was elected International Secretariat by the World Council.

Initially representing the private sectors of Belgium, Britain, France, Italy and the United States, it expanded to represent worldwide business organizations in around 140 countries.

World Council, National Committees, and International Secretariat - The ICC World Council is a general assembly of a major intergovernmental organization composed of business executives. National committees name delegates to the Council. Ten direct members may be invited to participate. It usually meets twice a year. The Council elects the Chairman and Vice-Chairman for two-year terms. The Council elects the Executive Board on the Chairman's recommendation.

The Secretary General heads the International Secretariat. The Secretary General works with the national committees to carry out ICC's work programs and is appointed by the World Council. The ICC International Secretariat, is based in Paris and is the operational arm of ICC. It carries out the work programme approved by the World Council, feeding business views into intergovernmental organizations.

The Executive Board is responsible for implementing ICC policy. The Executive Board has between 15 and 30 members of both business leaders and ex-officio members. They serve for three years. They have a one third rotation in membership. The Chairman, his immediate predecessor, and the Vice-Chairman form the Chairmanship.

National Committees represent the ICC in their respective countries. They recommend to the ICC their respective national business concerns in its policy recommendations to governments and international organizations. There are established formal ICC structures in over 90 countries. In countries where there is no national committee, companies and organizations such as chambers of commerce and professional associations can become direct members. ICC has access to national governments through its network of national committees.

Finance Committee, advices the Executive Board on all financial matters. It reviews the financial implications of ICC's activities and supervises the flow of revenues and expenses of the organization. The Chairman is elected by the ICC World Council.

Commissions develop international and national government initiatives in their subject areas. They also develop business positions for submission to international organizations and governments. Commissions are composed of more than 500 business experts from member companies.

B. Dispute Resolution Services

ICC International Court of Arbitration (ICA) continues to provide the most trusted system of commercial arbitration in the world, having received 14000 cases since its inception in 1923. Over the past decade, the Court's workload has considerably expanded.

The Court's membership has also grown and now covers 86 countries. With representatives in North America, Latin and Central America, Africa and the Middle East and Asia, the ICC Court has significantly increased its training activities on all continents and in all major languages used in international trade.

In the world of international commerce, the ICC is perhaps best known for its role in promoting and administering international arbitration as a means to resolve disputes arising under international contracts. It is one of the world's leading institutions in providing international dispute resolution services, together with the American Arbitration Association, the London Court of International Arbitration (LCIA), the Singapore International Arbitration Centre (SIAC), and the Stockholm Chamber of Commerce.

It is common for international commercial contracts to provide for an agreed means of resolving any disputes that may arise, and the ICC is one of leading institutions for administering international arbitration. The ICC's dispute resolution services also include ADR procedures such as mediation and expert determinations.

With the launch of ICC's BASCAP (Business Action to Stop Counterfeiting and Piracy) initiative, more than 130 companies and trade associations are now actively engaged in a set of projects designed to defeat the pirates and increase public and political awareness of the economic and social harm caused by this illegal activity. BASCAP is using ICC's global media network and national committee structure to spread the word.

BASCAP was launched in 2004 by the then ICC Chairman, Jean-Rene Fourtou, and its an operational platform established by ICC that connects all business sectors and cuts across all national borders, drawing them together to ensure that their message is clearly heard by governments and the public. BASCAP is prepared for a sustained effort to end this scourge. As the only business organization with a truky global reach, ICC is well placed to take the fight against counterfeiting to the level required for action to be effective.

D. ICC Rules

Since its establishment the ICC has adopted different rules to foster the settlement of disputes by using ADR. The rule that establishes the International Court of Arbitration, i.e. ICC Rule of Arbitration is the most recent one. In addition, it has adopted the ICC Rules of Optional Conciliation which came in to force in January, 1988. The later rule is now substantially being replaced by ICC ADR Rules. The widely used definition of ADR is not fully accepted by the ICC. For instance, ADR has been defined by as “Amicable Dispute Resolution” as contrary to the widely used meaning ‘Alternative Dispute Resolution’. In addition, in most of the official ICC documents and its rules, ADR does not include arbitration but only proceedings which do not result in a decision or award of the Neutral which can be enforced at law.

The ICC ADR Rules are the result of discussions between dispute resolution experts and representatives of the business community from 75 countries. Their purpose is to offer business partners a means of resolving disputes amicably, in the way best suited to their needs. A distinctive feature of the Rules is the freedom the parties are given to choose the technique they consider most conducive to settlement. Failing agreement on the method to be adopted, the fallback shall be mediation.

As an amicable method of dispute resolution, ICC ADR should be distinguished from ICC arbitration. They are two alternative means of resolving disputes, although in certain circumstances they may be complementary. For instance, it is possible for parties to provide for ICC arbitration in the event of failure to reach an amicable settlement. Similarly, parties engaged in an arbitration may turn to ICC ADR if their dispute seems to warrant a different, more consensual approach. The two services remain distinct, however, each administered by a separate secretariat based at ICC headquarters in Paris. The ICC ADR Rules, which replace the 1988 ICC Rules of Optional Conciliation, may be used in domestic as well as international contexts.

Let’s have a much closer look at the ICC Arbitration Rule adopted in the year 1998. The arbitration rule composed of different parts that supplement the body of the rule. It has 35 articles, which makes the main body of the rule, followed by three Appendixes.

The rule starts with a standard arbitration clause and standard clause for an ICC pre-arbitration reference procedure and ICC arbitration. As to my own view, it is desired to attain uniformity and common understanding between the disputants as to the valid effect of the proceeding and give full power either to the ICC rule and/or the tribunal as the case may be. Here are these standard clauses, the first being the arbitral clause and the second is the clause for an ICC pre-arbitration reference procedure and ICC arbitration. (www.iccarbitration.org).

“All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.”

“Any party to this contract shall have the right to have recourse to and shall be bound by the pre-arbitral referee procedure of the International Chamber of Commerce in accordance with its Rules for a Pre-Arbitral Referee Procedure.

All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules of Arbitration.”

The main body of the rule has 35 Articles under seven different headings. The first part is ‘Introductory Provisions’ composed of the declaration of the existence of the International Court of Arbitration (ICA) and definition of terms. The second part deals with the ‘the Commencement of the Arbitration’ like the effect of the arbitration agreement and the like. The next one is about the “Arbitral Tribunal” followed by the part which defines the ‘Arbitral Proceeding’. In these parts the number, appointment and replacement of arbitrators, and the place, rules, languages and closing of the tribunal has been well defined. The fifth part discusses about the ‘Award’ which, for instance, limits the maximum period when the ward should be given to be six months from the commencement of the tribunal. The last two parts speaks about the ‘Cost’ and ‘Miscellaneous’ matters, where the cost part is supplemented by Appendix III.

The three appendixes supplement the main body of the rule and they are equally persuasive. Appendix I is the ‘Statutes of International Court of Arbitration’ which stipulates the function of the court, its members and their appointment and their roles. Appendix II is entitled as ‘Internal Rule of the ICA’. This part exclusively regulates the confidential nature of courts work, the relationship of the members of the court (the Chairman, Vice-Chairmen, and members and alternate members - collectively designated as members) with panellists (arbitrators) and with the ICC National Committee. For instance, the members of the ICA may not act as arbitrators or as counsel in cases submitted to ICC arbitration. The last one, Appendix III, deals with ‘Arbitration Costs and Fees’ supported by two schedules, i.e. administrative expenses and arbitrator’s fee. The amounts of payment are determined according to the pecuniary interest involved over the matter in a regressive rate. The least payment is $2,500 for the administrative expense and the same mount as arbitrators’ fee for a dispute involving an amount not exceeding $50,000, and the maximum is $88,800 for the administrative expense and 0.01% to 0.056% as arbitrators’ fees for a dispute involving more than $100, 000, 000 pecuniary interests.

ICC has over eight decades of experience in devising rules to govern and facilitate the conduct of international business. These include those designed to resolve the conflicts that inevitably arise in trading relations. The ICC being intergovernmental institute is one of the popular institutes in the field of settling trade disputes. Among the means it uses in the settlement of disputes, ADR is one. It has also arbitration tribunal, International Court of Arbitration- ICA, established by the ICC arbitration Rule. Though, it is hardly possible to compare it, the Addis Chamber of Commerce (AACC) Arbitration Rule resembles the ICC arbitration Rule is some respects, like the existence of the cost and expense schedules. A question can be raised as to the cost effectiveness of ADR by observing the schedule of ICC and AACC arbitration rules.

Last modified on Wednesday, 02 May 2012 13:05